New Delhi, Nov 26 (IANS): In an attempt to chart a way out for the cash-strapped aviation industry, Prime Minister Manmohan Singh Saturday met with the heads of all the private carriers.
The meeting which was held at the prime minister's residence here was attended by Jet Airways' chairman Naresh Goyal, Kingfisher Airlines' chief executive Sanjay Aggarwal, GoAir owner Jeh Wadia, IndiGo Airlines' chairman Rahul Bhatia and SpiceJet chief executive Neil Mills.
The meeting lasted for around an hour. None of the attendees made any specific comments on what transpired during the meeting.
Meanwhile, industry sources say that key issues like proposed foreign direct investment (FDI) by foreign airlines, permission for direct jet fuel imports by aviation companies and relief by state-run oil marketing companies (OMCS) were on the table for discussion.
Owing to high jet fuel and interest costs three major airlines -- Kingfisher, Jet and SpiceJet -- have reported heavy second quarter losses.
Kingfisher Airlines alone reported a net loss of Rs.468.66 crore, owing to higher fuel costs and low yields.
The company's net loss stood at Rs.230.81 crore in the corresponding period of the last fiscal.
Jet Airways reported a net loss of Rs.713.60 crore in the second quarter from a net profit of Rs 12.40 crore in the same period of the previous fiscal.
Even budget airline SpiceJet lost Rs.240 crore in the quarter under review. It had a net profit of Rs.10 crore last year.
Jet fuel prices have increased by 30 percent since December 2010, and the domestic airlines are expected to lose Rs.3,500 crore in the first six months of this fiscal.
On FDI in domestic carriers by aviation players, Ravi said he would not make any statement as parliament was in session.
Earlier, the department of industrial policy and promotion (DIPP) proposed a 26 percent cap on FDI in the airline sector by foreign carriers.
"Private airlines in the country are in need of funds for operations and service upgradation to compete with other global carriers," the DIPP note said.
Currently, the government allows for FDI of 49 percent in Indian carriers by non-airline players but bans foreign airlines from directly investing due to security reasons.
On Friday, Civil Aviation Minister Vayalar Ravi announced the meeting schedule and said: "The PM is concerned... It's the major institution of connectivity, supporting the development of the country.".
Manmohan Singh had said Nov 12: "A private airline has to be managed efficiently, but if there are difficulties, we have to find ways and means to help them."